Some years ago Claude Bristol wrote a book entitled, “The Magic of Believing”. It covers, among other things, the importance of personal responsibility—in our decisions about school, our career paths, and our life goals. It applies to our moral standards, our management of personal finances, and our management of debt.

It applies in our personal lives, and to us as a nation.

Personal responsibility is part of the competitive advantage one nation may have over another, or one company over another. It does not show up on a balance sheet, or in an annual shareholder’s report, and it is doubtful it has ever shown up in a State of the Union address.

How we answer the question of personal responsibility is important. Who do we want to be?

Forty-eight years ago, John Kennedy uttered perhaps his most famous line, penned by speechwriter Ted Sorensen: “Ask not what your country can do for you . . . ask what you can do for your country.”

The risks to a nation’s “balance sheet” are huge when the mindset instead becomes, “Ask not what you can do for your country; ask what your country can do for you.”

Implicit in that mindset is that a person will not be taking care of his own life, let alone helping others, and also that Government will take care of him. When government says, “This is for your own good”, there are reasons to be concerned – that statement includes the implicit understanding that we do not have the discipline to do this ourselves.

However well-intended, government programs that are unaffordable and unsustainable will ultimately bankrupt a country, especially if they feed and house people who should be taking care of themselves.

This nation became great because of the freedom to succeed and fail, because of its innovative spirit, because of its entrepreneurs.

Our parents and grandparents lived in an era of make-do. They invented, they created, and they set aside tyranny; and worked hard to support their families, and to leave a better world for those who followed. We need to honor them and their sacrifice, and to emulate the best side of them – those values of thrift and fiscal prudence that sustained them.

During the Second World War, they made hard sacrifices. We, too, need to be ready to willingly make hard sacrifices, to get our fiscal house in order.

Some years back, a co-worker, who was raised in a western European nation, was discussing the difference between the unemployment rate and the precariousness index, i.e., an index of risk for those at the edge of unemployment. When asked whose responsibility precariousness was, he responded, “Why, the state’s, of course.” Then he added, “I’m a socialist, you see.”

He did not see a person’s own actions, or lack of actions, as having any part in creating precariousness.

Most Americans have the ability to obtain a good education, amass a sizable retirement savings, and cover their health expenses. It is about personal responsibility, and discipline. We all make decisions about what we buy, and when, and about saving, or carrying debt.

Most Americans are “in want”, not “in need”. And most citizens around the world would gladly trade places with any American, in a heartbeat. We are the luckiest people in the world: we have rights guaranteed in our constitution, and they cannot be taken away by a vote of the people.

U.S. government spending is currently on an unsustainable path; it is $3.5 trillion on $2.1 trillion in revenue. It has accumulated $12.9 trillion in outstanding debt over the past forty or fifty years, and has drawn down the entirety of the Social Security trust fund, $2.5 trillion, which will have to be paid back, starting this year.

The federal debt is currently just below 90% of GDP, and rising. At a certain point, that debt will reach an inflection point, the point where it will begin to grow faster than it can be reasonably paid off. It is the irreconcilable debt burden faced by Japan, and by some European nations.

This is our old friend, the power of compound interest, at work. It can work for us, or against us, depending on whether we are saving or borrowing. It is all about our spending decisions, both collectively and individually: how much, and when; and whether we are using saved money, or borrowed money.

The decisions to rein in deficit spending and reduce the accumulated debt to a manageable level will not be easy. The decisions cannot be all made by legislative fiat, or executive order, or judicial decree. Some of those decisions will need to originate from “we, the people”, telling our legislators what needs to be done to unburden our government from debt, to ensure the continuity of the republic.

We as a people must decide what services and programs we need government to provide; then, what additional services we want, and, finally, what services we do not want. This is our country, and the government is our government, created by the people, ” . . . deriving their just powers from the consent of the governed . . .”

We need to decide if we want to be a debtor nation, or to be an example of fiscal prudence and good governance.

** An American Promise **

● A Balanced-Budget Amendment to the Constitution, with appropriate exceptions for times of war and recession.
● A line-item veto, to give the President a fighting chance to eliminate pork and earmarks.
● A limitation on federal spending, to 20% of GDP.

** Building A Million Dollar Retirement Portfolio **

Remember that it's your money. If you live above your means, using borrowed money to do so, then the banks and money-lenders will own what should have been your retirement savings when you hit retirement age. This is especially true if you use borrowed money throughout your working years to purchase things that you want but do not necessarily need. Distinguish clearly between what you need and what you want. In the end, the fiscally prudent will own the fiscally profligate, and this applies equally to households, businesses and governments. If you think being a diligent saver will tank the economy, think again. The banks will lend money to those who spend it; investments in in mutual funds and individual stocks (i.e., publicly-held companies) will go back into the economy in the form of salaries, product development, plant expansion, and countless other ways. By saving or investing, your role has gone from being a direct consumer of goods and services to an indirect consumer. Unless you lock it in a vault or stuff it in a mattress, the money hasn't left the economy.
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